Credit Suisse discusses EUR/USD outlook and maintains a bearish outlook for a test of 1.13 over the coming weeks.
"The next key events on the calendar are the deadline for Italy to submit a revised proposal to the EU Commission by 13 November, and for the EU Commission to produce a final assessment on all member countries budgets by 30 November. As things stand, Italian officials have signalled willingness to negotiate with EU authorities, but are still ruling out meaningful changes to the budget. As long as the prospect for conflict remains alive, we think any attempts by the EUR to rally should be short lived," CS argues.
For EUR to resume its downward trend, however, we think markets would need to see a more significant challenge to the current set of expectations. The ongoing sharp weakness in Italian data suggests this moment could come sooner rather than later," CS adds.